Silicon Valley Bank Saga is a tragedy of errors | Prof. Sanjoy Sircar writes for Business World

The article highlights that Silicon Valley Bank (SVB) depositors were startups and venture capital investors, whose deposits are not as sticky as retail customers.

SVB’s past investments of its cash reserves in the US debt markets at near zero interest rates made it an underperformer. With its credit ratings under threat, SVB was staring at a $1.8 billion loss, trying to rebalance its underperforming $21 billion debt portfolio. SVB failed due to a run on the bank, when the truth is that it was neither insolvent or even close to being so. Banking as an enterprise survives as much on cash as on confidence, and as the latter waned, the former disappeared.